NEW YORK — Ken Dayton, former chief executive officer of Dayton Hudson Corp., and grandson of the founder of the retailer, now called Target Corp., died Saturday — a day before his 81st birthday — at his Minneapolis home. The cause of death was complications stemming from refractory anemia, a rare blood disease.

Ken Dayton, the fourth of five brothers, was the last Dayton to function as an executive of the firm, founded in 1902 by George Drayper Dayton, a Scottish Presbyterian with a strong social conscience. He retired in 1976, as chief executive officer, and exited the board of the Minneapolis-based firm in 1983. At that time, the company had grown from a single store in downtown Minneapolis to the parent of four chains — Dayton’s, Hudson’s, Mervyn’s and Target — with combined revenue exceeding $5 billion.

Dayton joined the family’s store in Minneapolis in 1946 after returning from Army service in World War II, where he drove a Sherman tank from La Havre, France, to Pilsner, Czechoslovakia, and there heard Winston Churchill announce the surrender of Germany, his widow, Judy, recalled Monday.

Widely described as a humble executive, Dayton was credited by Target Corp. for “realizing people are at the heart of every business” and, subsequently, for being “a leader in corporate governance.” Reading from a 1984 Harvard Business Review article her husband had written on the topic, Judy Dayton recited, “My conviction is that the board of directors is the Achilles’ heel of American corporations. Every time you find a corporation in trouble, you find a board of directors either unwilling or unable to fulfill its responsibilities.”

Furthermore, Judy Dayton related, “he believed every company has four constituents — customers, shareholders, employees and the communities in which they operate. He inherited from his father, [George Nelson Dayton], the idea that 5 percent of pretax profits should go directly to the community.” Thus, Judy and Ken Dayton, who celebrated their 50th wedding anniversary last month, donated tens of millions of dollars to the arts. The Minnesota Orchestra, Walker Art Center and The Minnesota Opera were among their biggest benefactors.

“Minneapolis has not had a great collection of politicians, but it has had great civic leaders, and I’d say Ken Dayton was the best among them,” Minneapolis Mayor R.T. Rybak observed Monday. “In a quiet, self-effacing way, Ken Dayton led a generation of business people to become civic leaders.”Today, Target Corp. is the nation’s fourth largest retailer, ranked by sales, which totaled $43 billion in 2002 and were surpassed only by Wal-Mart, with sales of $247 billion; Home Depot, $58 billion, and Kroger, $52 billion. The Dayton’s and Hudson’s stores that formed the foundation of the retailer’s franchise were renamed Marshall Field’s in 2001 to reflect the nationally known nameplate of the Chicago-based chain DH had acquired in 1990.

In addition to his wife, Judy, a Minneapolis resident, Dayton is survived by two of his brothers, Bruce and Douglas, both of Wayzata, Minn. Donald, the eldest of Ken Dayton’s brothers, died in 1989, and Wallace, died last October.

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